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Producing in China is essential to avoiding tariffs, which increase the price of imported cars. For Tesla, this has been a constant struggle with the Model S and Model X, but with the lower-cost Model 3, it would be even more negatively impactful.
Therefore, it’s assumed that the majority of Model 3 sold in China will be produced there.
Automotive News adds:
“Tesla Inc. said on Friday that it is developing plans to start producing about 3,000 Model 3 vehicles per week in Shanghai in the initial phase of its Gigafactory 3 to reduce the impact of tariffs.”
Tesla added that its near-term goal is to get production of the Model 3 at its Fremont factory to a level of 7,000 per week, which is considerably above the ~5,000 produced weekly right now.
Longer term, the target is still 10,000 in Fremont, plus 3,000 eventually in China for a total of 13,000 per week.
You can check out Tesla’s progress so far in China here in this groundbreaking construction video.
Source: Automotive News
This article originally appeared on Inside EVs.